Tech giants hold upper hand in media negotiations
Australia raised the penalty rate on tech giants that won't pay local news outlets — but quietly changed the calculation in ways that may cost the platforms less than before.
The government has announced changes to Australia's news bargaining laws that, on paper, increase pressure on big tech platforms to cut deals with local news organisations. The levy for failing to do so rises from 2.25 to 2.5 per cent. But buried in the fine print is a concession that tells you everything about who actually holds the cards in this negotiation: the levy will now apply only to digital advertising revenue, not total revenue. The rate went up. The base it is applied to got much, much smaller.
The arithmetic matters here. Google's global revenue runs to hundreds of billions of dollars. Its Australian digital advertising slice is a fraction of that. A 2.5 per cent levy on the smaller number can easily be less than a 2.25 per cent levy on the larger one would have been. The government has framed the concession as targeting "the part of the business that uses the news," which is a reasonable-sounding principle. But the practical effect is that the platforms negotiated the calculation methodology at least as successfully as the government negotiated the rate.
Meta's 2021 exit showed the platforms don't need news — government still hasn't closed that gap
None of this is especially surprising to anyone who has watched how this has played out since the original News Media Bargaining Code was introduced in 2021. That code was sold as a landmark moment, a small country standing up to the most powerful companies in the world. What followed was rather more instructive. Meta simply removed news from its Australian platforms rather than pay for it. The code, designed with the assumption that platforms needed news, ran headlong into the reality that they had already figured out they did not. Meta's Australian users barely flinched. The news organisations that had hoped for a sustainable revenue stream got nothing. This is the same dynamic we noted when Pauline Hanson locked traditional media out of a One Nation press conference and the practical consequences were minimal: legacy outlets have lost the institutional leverage that once made ignoring them costly.
The platforms have more leverage, more patience, and more options than the news industry does, and the structure of every deal struck so far has reflected that.
The new scheme tries to close that loophole by applying the levy regardless of whether platforms host news. That is the genuinely new design feature, and it is not nothing. If Meta cannot exit the payment obligation simply by de-listing news, the earlier escape route is closed. But the concession on revenue base reopens a different one. And the pattern of negotiation here — tech companies push back, government bends on the methodology — is not one that suggests the final legislation will be especially painful for the platforms.
The marginal fixes don't touch the structural problem
The government is also extending the definition of journalists to include freelancers and production roles, increasing offsets for small publisher deals, and directing five per cent of any levy collected into a grants programme for start-ups and small publishers. These are sensible adjustments at the margin. They do not change the underlying structure of the problem, which is that online advertising revenue has migrated to platforms that did not exist when most Australian news organisations built their business models, and is not coming back.
Assistant Treasurer Daniel Mulino expressed confidence that tech companies would not exit the Australian market rather than comply. He is probably right about that. Australia is a large and profitable market. But "they won't leave" is a low bar for declaring a policy a success. The more relevant question is whether the scheme generates enough revenue, distributed effectively enough, to make a material difference to the sustainability of Australian journalism. On current design settings, that looks doubtful. The original code moved less money than its architects had hoped. The amended version may move less still, even with a higher nominal rate.
Keeping existing news organisations alive is not the same as ensuring good journalism
There is also the question of what this intervention is actually optimising for. Keeping existing news organisations alive is not the same thing as ensuring Australians have access to good journalism. Some of the organisations that would benefit most from a generous levy settlement are the same ones shedding journalists and closing regional bureaus regardless. The five per cent carve-out for new starters is at least an acknowledgement that the future of journalism might not look like its past.
The government has not lost the argument that tech platforms should contribute to the journalism ecosystem they benefit from. That case is coherent and the principle behind the scheme is defensible. What it has lost, repeatedly and in public, is the negotiation. The platforms have more leverage, more patience, and more options than the news industry does, and the structure of every deal struck so far has reflected that. Raising the rate while conceding the base is not closing that gap. It is dressing the same gap in different numbers.
Sources
ABC News — Big tech companies that fail to strike deals with Australian media to face higher levy
Frequently Asked Questions
What is Australia's News Bargaining Incentive and how does it work?
The News Bargaining Incentive is a levy scheme that requires large tech platforms to either reach commercial deals with Australian news organisations or pay a government-imposed charge. Under the updated scheme, the levy rate rises from 2.25 to 2.5 per cent, but it now applies only to a platform's Australian digital advertising revenue rather than its total revenue.
Why did Meta block news on Facebook in Australia?
In 2021, Meta responded to the original News Media Bargaining Code by simply removing news content from its Australian platforms rather than pay for it. The move revealed that platforms had already determined they did not depend on news to retain users — Meta's Australian audience barely reacted, and the news organisations that had expected a revenue stream received nothing.
Does the new levy mean Google and Meta will pay more to Australian media?
Not necessarily, and possibly less than the original design would have required. Applying a higher rate to a narrower base — digital advertising revenue only, rather than total revenue — can produce a smaller absolute payment. The government has not published figures comparing the two calculations.
Can tech companies avoid the new Australian media levy by removing news from their platforms?
The updated scheme is designed to prevent exactly that. Unlike the 2021 code, the new levy applies regardless of whether platforms host or link to news, closing the exit route Meta used previously. Whether the enforcement mechanism is robust enough to hold that line remains to be seen.
Will the news bargaining levy actually save Australian journalism?
The levy is unlikely to reverse the structural decline of legacy news organisations. Online advertising revenue has permanently migrated to platforms, and some outlets that would benefit most from the scheme are already shedding journalists and closing regional bureaus. A five per cent grants allocation for new and small publishers is a partial acknowledgement that the future of journalism may not resemble its past.